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Medine v. State Farm Insurance Co.

United States District Court, M.D. Louisiana

August 15, 2018

MICHAEL AND RENE MEDINE
v.
STATE FARM INSURANCE COMPANY

          MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

          RICHARD L. BOURGEOIS, JR., UNITED STATES MAGISTRATE JUDGE

         Before the Court is Plaintiff's Motion to Remand (R. Doc. 3) filed on April 9, 2018. The motion is opposed. (R. Doc. 6).

         I. Background

         On or about February 6, 2018, Michael and Rene Medine (“Plaintiffs”) filed their “Petition for Insurance Benefits, Penalties and Attorney Fees” in the 23rd Judicial District, Ascension Parish, Louisiana, naming as defendant State Farm Fire and Casualty Company (“State Farm”). (R. Doc. 1-2 at 4-5, “Petition”). Plaintiffs allege that they own residential property in Ascension Parish that is insured by State Farm, and that they filed a claim with State Farm seeking policy benefits for hail damage caused to their roof by a tornado. (Petition ¶¶ 2-3). Plaintiffs assert that they “sent itemized repair estimates and statements from contractors verifying the hail damage on several occasions beginning in September 2017.” (Petition ¶ 4). Plaintiffs assert that “State Farm refused to pay damages and failed to investigate damages to the residence next door making” its actions “arbitrary and capricious” in violation of Title 22 of the Louisiana Insurance Code. (Petition ¶ 5). Plaintiffs seek recovery of “insurance benefits” as well as “attorney fees, penalties and all sanctions” allowed under Louisiana law. (Petition ¶ 6).

         On March 14, 2018, State Farm removed this action asserting that the Court can properly exercise diversity jurisdiction under 28 U.S.C. § 1332. (R. Doc. 1). In the Notice of Remand, State Farm claims that the amount in controversy is satisfied based upon the contractor estimate for claimed repair costs in excess of $50, 000 in addition to the penalties and attorney fees sought under Louisiana law. (R. Doc. 1 at 2). State Farm filed an Amended Notice of Removal clarifying that there is complete diversity because Plaintiffs are citizens of Louisiana and State Farm is a citizen of Illinois. (R. Doc. 5).

         On April 9, 2018, Plaintiffs filed the instant Motion to Remand asserting that the Court lacks diversity jurisdiction because the amount in controversy requirement is not satisfied. (R. Doc. 3).

         II. Arguments of the Parties

         In support of remand, Plaintiffs argue that the amount in controversy requirement is not satisfied in light of their affidavit dated April 9, 2018 (R. Doc. 3-2), which asserts that their claims do not exceed $75, 000, and an “Irrevocable and Binding Stipulation” dated April 6, 2018 (R. Doc. 3-3), which asserts that Plaintiffs will not accept an award exceeding $75, 000. (R. Doc. 3-1).

         In opposition, State Farm argues that the amount in controversy was satisfied at the time of removal. (R. Doc. 6). State Farm concedes that the amount in controversy is not facially apparent. (R. Doc. 6 at 3). State Farm submits evidence, however, that prior to filing the Petition, Plaintiffs submitted an estimate of $57, 150 for repairs to the roof of their house and shed, and that the applicable deductible on the underlying policy is $4, 809. (R. Doc. 6-1). In light of this evidence, State Farm argues that any ambiguity regarding the amount in controversy requirement is satisfied as Plaintiffs are seeking to recover at least $52, 341 under the policy (in light of the deductible), as well as bad faith penalties under La. R.S. 22:1892 up to $26, 170.50, and an unstated amount of attorney's fees. (R. Doc. 6 at 3-4). Finally, State Farm argues that the post-removal submissions by Plaintiff do not deprive the Court of diversity jurisdiction. (R. Doc. 6 at 5-7).

         III. Law and Analysis

         A. Legal Standards

         A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). When original jurisdiction is based on diversity of citizenship, the cause of action must be between “citizens of different States” and the amount in controversy must exceed the “sum or value of $75, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(a)-(a)(1). Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (“jurisdictional facts must be judged as of the time the complaint is filed”). Remand is proper if at any time the court lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c).

         If removal is sought on the basis of diversity jurisdiction, then “the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy.” 28 U.S.C. § 1446(c)(2). If, however, the “State practice . . . permits the recovery of damages in excess of the amount demanded, ” removal is proper “if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds [$75, 000].” 28 U.S.C. § 1446(c)(2)(A)(ii)-(B). In Louisiana state court, plaintiffs are generally prohibited from alleging a specific monetary amount of damages sought in their petitions, and are required to state whether there is a “lack of jurisdiction of federal courts due to insufficiency of damages.” La. Code Civ. P. art. 893(A)(1).

         The burden of proof is on the removing defendant to establish that the amount in controversy has been satisfied. Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999). The defendant may make this showing by either (1) demonstrating that it is facially apparent that the claims are likely above $75, 000, or (2) setting forth facts in controversy that support a finding of the jurisdictional minimum. Id. If the defendant can produce evidence sufficient to show by a preponderance that the amount in controversy exceeds the jurisdictional threshold, the plaintiff can defeat diversity jurisdiction only by showing to a legal certainty that the amount in controversy does not exceed $75, 000. See, e.g., St. Paul Mercury ...


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